Non-compete clause

In contract law, a non-compete clause (often NCC), or covenant not to compete (CNC), is a clause under which one party
(usually an employee) agrees not to enter into or start a similar profession or trade in competition against another party (usually
the employer). Some courts refer to these as "restrictive covenants." As a contract provision, a CNC is bound by traditional
contract requirements including the consideration doctrine.

The use of such clauses is premised on the possibility that upon their termination or resignation, an employee might begin
working for a competitor or starting a business, and gain competitive advantage by exploiting confidential information about their
former employer's operations or trade secrets, or sensitive information such as customer/client lists, business practices, upcoming
products, and marketing plans.

However, an over-broad CNC may prevent an employee from working elsewhere at all. English common law originally held any
such constraint to be unenforceable under the public policy doctrine.[1] Contemporary case law permits exceptions, but generally
will only enforce CNCs to the extent necessary to protect the employer. Most jurisdictions in which such contracts have been
examined by the courts have deemed CNCs to be legally binding so long as the clause contains reasonable limitations as to the
geographical area and time period in which an employee of a company may not compete.[2]

The extent to which non-compete clauses are legally allowed varies per jurisdiction. For example, the state of California in the
United States invalidates non-compete-clauses for all but equity stakeholders in the sale of business interests.[3]

Contents
History
Canada
China
Applicable Personnel
Rights and Obligations
Compensation
Consequence of Breaching The Agreement
Europe
India
Pakistan
United States
California
Enforcement of out-of-state agreements
Exceptions
Florida
Hawaii
Illinois
Massachusetts
Historical context
Current law
Reasonableness
Consideration
Texas
 Utah
Virginia
Legitimate business interest
Reasonable restriction on employee's ability to earn a living
Public policy
Washington
Cases
Related restrictive covenants
References
Works cited
External links

History
As far back as Dyer's Case in 1414, English common law chose not to enforce non-compete agreements because of their nature
as restraints on trade.[4] That ban remained unchanged until 1621, when a restriction that was limited to a specific geographic
location was found to be an enforceable exception to the previously absolute rule. Almost a hundred years later, the exception
became the rule with the 1711 watershed case of Mitchel v Reynolds[5] which established the modern framework for the analysis
of the enforceability of non-compete agreements.[6]

Canada
Canadian courts will enforce non-competition and non-solicitation agreements, however, the agreement must be limited in time
frame, business scope, and geographic scope to what is reasonably required to protect the company's proprietary rights, such as
confidential marketing information or client relations[7] and the scope of the agreement must be unambiguously defined. The
2009 Supreme Court of Canada case Shafron v. KRG Insurance Brokers (Western) Inc. 2009 SCC 6, held a non-compete
agreement to be invalid due to the term "Metropolitan City of Vancouver" not being legally defined.[8]

The 2000 Ontario Court of Appeals case Lyons v. Multary established a general preference towards non-solicitation over non-
competition agreements, regarding the latter as "much more drastic weapons" and held a non-competition agreement to be invalid
when a non-solicitation agreement would have been sufficient to protect the company's interests.

China

Applicable Personnel
For an employee who has the obligation to protect the employer’s confidentiality and trade secrets, the employer and the
employee may agree on the inclusion of non-competition clauses in the employment contract or a separate non-disclosure
agreement. In the event that the employment contract has been terminated or has expired, during the agreed non-competition
period, the employer shall pay compensation to the employee on a monthly basis. If the employee breaches the non-competition
agreement, he/she shall pay damages to the employer as agreed.

The personnel subject to non-competition agreement shall be limited to the employer’s senior management, senior technicians
and other personnel with a confidentiality obligation. The scope, area and term of the non-competition agreement shall be agreed
by both the employer and the employee, and such agreement must not violate the laws and regulations.

Rights and Obligations

Upon termination or expiration of the employment contract, the term of non-competition for any of the persons as mentioned in
the preceding clause to work in any other employer producing or engaging in products of the same category or engaging in
business of the same category as this employer shall not exceed two years.

If the parties have reached an agreement on non-competition and compensation, unless another agreement is in place, the
employer is entitled to ask the employee to comply with the non-competition obligations when the employment contract is ended,
and the People’s Court shall support this request. The employee, after complying with the non-competition obligations, is entitled
to request the agreed compensation from the employer, and the People’s Court shall support this request.

If during the period of non-competition, the employer asks to terminate the non-competition agreement, the People’s Court shall
support said petition. When terminating the non-competition agreement, if the employee requests the employer to pay an extra 3-
month non-competition compensation, the People’s Court shall support said request.

Compensation
When the non-competition obligation has been agreed, but the compensation for the duration after the termination or expiration of
the employment contract has not been determined, if the employee has performed the non-competition obligations, and requests
the monthly compensation which is equal to 30% of his/her average monthly salary of the twelve months previous to the
termination or expiration of the employment contract, the People’s Court shall support said request.

If the 30% average monthly salary of the twelve months previous to the termination or expiration of the employment contract as
mentioned in the preceding clause is lower than the minimum wage of the region where the employment contract is performed,
the employer shall pay according to the minimum wage.

Consequence of Breaching The Agreement

When an employee violates this Law to terminate the employment contract, or violates the stipulations of the employment
contract about the confidentiality obligation or non-competition and any loss is caused to the employer, the employee shall be
liable for damage compensation.

If an employer and an employee have agreed upon both a non-competition agreement and compensation in the employment
contract or confidentiality agreement, and if after the termination or expiration of the employment contract, the employer has not
paid said compensation for three months due to its own reasons and the employee requests termination of the non-competition
agreement, the People’s Court shall support such request.

After an employee violates the non-competition agreement and pays liquidated damages to the employer, if the employer requests
the employee to continue to perform non-competition obligations as agreed, the People’s Court shall support such request.

Europe
Generally, CNCs are allowable in Europe only if the employer can show a reasonable business interest in having a CNC.

In Belgium, CNCs are restricted to new employments within Belgium and for no more than one year. The
employer must pay financial compensation for the duration of the CNC, amounting at least half of the gross
salary for the corresponding period.[9]
In France, CNCs must be limited in time to a maximum of two years and to a region where the employee’s new
work can reasonably be seen as competitive. The region can be a city or the whole country, depending on the
circumstances. The employer must pay financial compensation, typically 30 percent of the previous salary.[10] A
CNC may not unreasonably limit the possibilities of the employee to find a new employment.
In Germany, CNCs are allowed for a term up to two years. The employer must provide financial compensation
for the duration of the CNC amounting to at least half the gross salary.[11] Unreasonable clauses – for example,
excluding similar jobs throughout the whole of Germany – can be invalidated.
 In Italy, CNCs are regulated by articles 2125, 2596, and 1751 bis of the civil code.
In the Netherlands, non-compete clauses (non-concurrentiebeding or concurrentiebeding) are allowed regarding
issues such as moving to a new employer and approaching customers of the old company. Unreasonable
clauses can be invalidated in court.[12]
In Portugal, CNCs are regulated by article 136 of the labor code and restricted to two years extendible to three
years in cases of access to particularly sensitive information. The employer must pay financial compensation for
the duration of the CNC but the law doesn’t specify anything regarding the amount of the compensation.[13]
In Romania, CNCs are regulated by articles 21-24 of the labor code and restricted to two years. The employer
must pay financial compensation for the duration of the CNC, amounting to at least 50 percent of the last 6
months salary.
In Spain, CNCs are regulated by article 21 of the labor law. CNCs are allowed up to two years for technical
professions and six months for other professions.
In the United Kingdom, CNCs are called restraint of trade clauses, and may be used only if the employer can
prove a legitimate business interest to protect in entering the clause into the contract. Mere competition will not
amount to a legitimate business interest.[14]

In Crown dependencies, as there are no directly relevant laws it is generally accepted that UK Crown law
applies but in the case of intellectual property many financial and other institutions require employees to sign 10
year or longer CNCs which could be seen to apply even if they leave the country or enter an unrelated field of
work. Some of the conditions actually violate the Human Rights Act to wit: freedom of expression and freedom of
speech but as the CNC itself is also subject to a non disclosure agreement it is difficult to know just what rights
have been signed away. In principle even social media posts, Emails, books etc from before or after the time of
employment may be covered by an NDA or CNC despite this also being a blatant breach of human rights and
GDPR it could be said that Governments choose the lesser of two evils to increase employment. Some
comparisons have been drawn between these documents and the Official Secrets Act.[15]

India
Section 27 of the Indian Contract Act has a general bar on any agreement that puts a restriction on trade.[16] On this basis, it
would appear that all non-compete clauses in India are invalid. However, the Supreme Court of India has clarified that some non-
compete clauses may be in interest of trade and commerce, and such clauses are not barred by Section 27 of the Contract Act, and
therefore valid in India.[17] Notably, only those clauses backed by a clear objective that is considered to be in advantage of trade
and commerce survives this test. For instance, a co-founder of a startup who signed a non-compete clause can be held to it,[18]
but if a junior software developer or a call center employee signs a non-compete clause with the employer, the same may not be
enforceable.

Pakistan
According to Section 27 of the Contract Act, 1872, any agreement that restrains a person from exercising a lawful profession,
trade or business is void.[19] However, courts of Pakistan have made decisions in the past in favour of such restrictive clauses
given that the restrictions are "reasonable".[20] The definition of "reasonable" depends on the time-period, geographical location
and the designation of employee. In the case of Exide Pakistan Limited vs. Abdul Wadood, 2008 CLD 1258 (Karachi), the High
Court of Sindh stated that reasonableness of the clause will vary from case to case and depends mainly on duration and extent of
geographical territory[21]

United States
The majority of U.S. states recognize and enforce various forms of non-compete agreements. A few states, such as California,
Montana, North Dakota, and Oklahoma, totally ban non-compete agreements for employees, or prohibit all non-compete
agreements except in limited circumstances.[22] For this reason, non-compete agreements have been popular among companies
with employees working in states where they are allowed.[23] They are very common among commercial radio stations and
television stations, especially for radio personalities and television personalities working for media conglomerates. For example,
if a radio or television personality quits, is laid off or fired from one station in the media market they work in, they cannot work
for another competing station in the same market until their contract expires with their former employing station.[24]

As of 2018, non-compete clauses cover 18 percent of United States workers, and this is down from 38 percent of workers. While
more prevalent among higher-wage workers, non-competes covered 14 percent of workers without college degrees in 2018.[25] In
March 2019, the U.S. Federal Trade Commission was under pressure by politicians, unions, and advocacy groups to ban non-
compete clauses. A related petition estimated that "one out of every five U.S. workers -- or about 30 million -- is bound by such
an agreement."[26]

California
Non-compete agreements are automatically void as a matter of law in California, except for a small set of specific situations
expressly authorized by statute.[27] They were outlawed by the original California Civil Code in 1872 (Civ. Code, former §
1673)[28], under the influence of the American legal scholar David Dudley Field II.[29]

Enforcement of out-of-state agreements

A leading court decision discussing the conflict between California law and the laws of other states is the 1998 decision
Application Group, Inc. v. Hunter Group, Inc.[30] In Hunter, a Maryland company required that its Maryland-based employee
agree to a one-year non-compete agreement. The contract stated that it was governed by and to be construed according to
Maryland law. A Maryland employee then left to work for a competitor in California. When the new California employer sued in
California state court to invalidate the covenant not to compete, the California court agreed and ruled that the non-compete
provision was invalid and not enforceable in California. Business and Professions Code Section 16600 reflects a “strong public
policy of the State of California” and the state has a strong interest in applying its law and protecting its businesses so that they
can hire the employees of their choosing. California law is thus applicable to non-California employees seeking employment in
California.

Whether California courts are required by the Full Faith and Credit Clause of the United States Constitution to enforce equitable
judgments from courts of other states, having personal jurisdiction over the defendant, that enjoin competition or are contrary to
important public interests in California is an issue that has not yet been decided.[31]

Exceptions
There are limited situations where a reasonable non-compete agreement may be valid in California.

1. Where the owner of a business is selling the entire business, or is selling the goodwill in the business, the seller
may be bound by a non-compete clause.[32]
2. When there is a dissolution or disassociation of a partnership.[33]
3. Where there is a dissolution of a limited liability company.[34]

Florida
The enforceability of non-compete agreements in the state of Florida is quite common. Some law firms build their law practice
around these agreements and represent employees, employers and potential new employers of an employee currently bound by a
non-compete agreement. The agreement is not allowed to be overly broad and generally difficult to enforce if it is for more than
two years.[35] However, Florida courts will rarely refuse to enforce a non-compete agreement due to its length or geographic
scope. Instead, under Florida law, courts are required to "blue pencil" an impermissibly broad or lengthy non-compete agreement
to make it reasonable within the limits of Fla. Stat. § 542.335.[36] Also if the agreement is part of a general employment contract
then there is the possibility of a prior breach by an employer. This may cause the non-compete clause of the contract to become
unenforceable. However, recent case law from Florida's appellate courts has eroded the utility of the prior breach defense.[37]

Hawaii
A new law bars high-tech companies, but only such companies, in Hawaii from requiring their employees to enter into “non-
compete” and “non-solicit” agreements as a condition of employment. The new law, Act 158, went into effect on July 1, 2015.[38]

Illinois
Noncompete agreements will be enforced in Illinois if the agreement is ancillary to a valid relationship (employment, sale of a
business, etc.) and (1) must be no greater in scope than is required to protect a legitimate business interest of the employer, (2)
must not impose an undue hardship on the employee, and (3) cannot be injurious to the public.[39] While reasonable geographic
and temporal limitations on the noncompete agreement are not expressly required by governing law, they tend to be examined as
a measure of whether the scope of the noncompete is greater than is required to protect a legitimate business interest of the
employer.[40]

Unlike other jurisdictions, which follow the general rule that consideration is only important as to whether it exists and not as to
whether it is adequate, Illinois will inquire into the adequacy of consideration.[41] The majority of courts will require at least two
years of continued at-will employment to support a noncompete agreement (or any other type of restrictive covenant). However,
in certain cases involving particularly sharp conduct by an employee, courts have required less.

While Illinois courts state the rule above, logically the analytical steps should be in reverse order—because inadequate
consideration is fatal to the claim. Thus, under McInnis v. OAG Motorcycle Ventures, Inc.[42] there are three requirements in order
for a post employment restrictive covenant limiting a former employee’s right to work for a competitor to be enforceable under
Illinois law: (1) it must be ancillary to a valid contract; (2) it must be supported by adequate consideration; and (3) it must be
reasonable, considering whether it: (a) is no greater than is required for the protection of a legitimate business interest of the
employer, (b) does not impose undue hardship on the employee, and (c) is not injurious to the public. The McInnis decision
interpreted the Fifield decision, above, to mandate two years’ employment in order for consideration to be adequate.

Starting in 2017, Illinois banned noncompete clauses against employees earning less than $13 per hour.[43][44]

Massachusetts
Noncompete agreements will be enforced in Massachusetts in appropriate circumstances.[45]

Historical context
By 1837, Massachusetts had indisputably adopted the analysis established in Mitchel.[46] In 1922, the Supreme Judicial Court
eliminated any doubt that restrictive covenants in the employment context would be enforced when reasonable.[47]

Current law
The basic proposition enunciated long ago continues to apply: “A covenant not to compete is enforceable only if it is necessary to
protect a legitimate business interest, reasonably limited in time and space, and consonant with the public interest.”[48]

Reasonableness
Reasonableness is the touchstone of the analysis and is highly fact-dependent.[49] The context in which the CNC arises (such as
employment relationship, contractual relationship) is a critical factor in the analysis.[50] A CNC that is unreasonable because it is
too broad, will be scaled back if it is in fact capable of being narrowed.[51]

Even when a CNC is limited in duration, geographic reach, and scope, it will be enforced “only to the extent . . . necessary to
protect the legitimate business interests of the employer.”[52] Recognized legitimate business interests are generally identified as
the protection of trade secrets, confidential information, and goodwill.[53]

Consideration
An otherwise valid CNC must still, like other contracts, be supported by consideration. Accordingly, the Supreme Judicial Court
has held that a CNC must be “ancillary . . . to an existing employment or contract of employment” or some other “permissible
transaction . . . .”[54] However, consideration can exist regardless of whether the CNC is entered into at the beginning of the
employment relationship, during the term of employment, or even at the end of an employment relationship.[55]

Texas
Under Texas law "a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at
the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be
restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business
interest of the promisee."[56] Specific rules apply to physicians, notably that a physician cannot be prohibited "from providing
continuing care and treatment to a specific patient or patients during the course of an acute illness even after the contract or
employment has been terminated."[57]

However, Texas courts will not enforce a covenant not to compete if the court determines that such a covenant "is against public
policy and therefore substantively unconscionable."[58]

Utah
CNCs are enforceable, but any CNC entered into after May 10, 2016 may not extend for a period of more than one year.[59][60]

Virginia
In Virginia, the enforceability of covenants not to compete is governed by common law principles. As restrictions on trade, CNCs
are not favored by Virginia courts, which will enforce only narrowly drafted CNCs that do not offend public policy.

In Virginia, a plaintiff must prove by a preponderance of the evidence that the covenant is reasonable in the sense that it is: (1) no
greater than necessary to protect its legitimate business interests, such as a trade secret; (2) not unduly harsh or oppressive in
restricting the employee's ability to earn a living; and (3) not against public policy. Paramount Termite Control Co., Inc v. Rector,
380 S.E.2d 922, 924 (Va. 1989).

Legitimate business interest

In Virginia, courts weigh the (1) function, (2) geographic scope and (3) duration of the CNC against the employer's legitimate
business interests to determine their reasonableness.[61] Additionally, CNCs are only reasonable if they prevent the employee
from entering into direct competition with the employer and must not encompass any activity in which the employer is not
engaged.[62] Virginia courts will not generally attempt to revise or enforce a narrower restriction in a non-compete agreement. As
a result, a drafting error or unenforceable restriction may render the entire agreement unenforceable in Virginia.[63]
Reasonable restriction on employee's ability to earn a living
Second, to enforce the CNC, a plaintiff must show that it is not unduly harsh or oppressive in restricting the employee's ability to
earn a living. In Virginia, a CNC is not unduly harsh or oppressive if balancing its function, geographic scope and duration the
employee is not precluded from (1) working in a capacity not in competition with the employer within the restricted area or (2)
providing similar services outside the restricted area.[64]

Public policy
Third, to enforce a CNC, a plaintiff must show the CNC is reasonable from the standpoint of a sound public policy. Virginia does
not favor restrictions on employment and therefore CNCs are generally held against public policy unless they are narrowly
drafted as enumerated above. In Virginia, a CNC does not violate public policy if the restrictions it imposes do not create a
monopoly for the services offered by the employer or create a shortage of the skills provided by the employee.[65]

Washington
According to Racine v. Bender, CNCs will be enforced by courts if they are validly formed and reasonable.[66] There are
exceptions, like in Labriola v. Pollard Group, Inc., where the Washington Supreme Court invalidated a CNC not supported by
independent consideration by strictly enforcing the pre-existing duty rule.[67]

Cases
In 2005, Microsoft and Google litigated the enforceability of a non-compete clause in Kai-Fu Lee's employment
contract with Microsoft. Difference in state laws were highlighted as Google attempted to maneuver the case to
California courts, where California law would be more likely to hold the clause unenforceable.[28]
IBM v. Papermaster (No. 08-9078, 2008 U.S. Dist): Mark Papermaster moving from IBM to Apple computer in
2008.[68]
In April 2010, after a year of non-compete clause stipulated on the contract, Paul Teutul Jr., formerly from Orange
County Choppers, was able to start his own new non-motorcycle design company.[69]

Related restrictive covenants

While CNCs are one of the most common types of restrictive covenants, there are many others. Each serves a specific purpose
and provides specific rights and remedies. The most common types of restrictive covenants are as follows:

Garden-leave clause: a type of CNC by which an employee is compensated during the period that the employee
is restricted.
Forfeiture-for-Competition Agreement and Compensation-for-Competition Agreement: an agreement by which an
employee either forfeits certain benefits or pays some amount of money to engage in activities that are
competitive with his former employer.
Forfeiture agreement: an agreement by which an employee forfeits benefits when his employment terminates,
regardless of whether he engages in competitive activities.
Nondisclosure/confidentiality agreement: an agreement by which a party agrees not to use or disclose the other
party's confidential information.
Non-solicitation agreement: an agreement by which an employee agrees not to solicit and/or not to accept
business from the employer's customers.
Antipiracy agreement: an agreement by which an employee agrees not to solicit and/or not to hire the employer's
employees.
Invention assignment agreement: an agreement by which an employee assigns to the employer any potential
inventions conceived of during employment.
The enforceability of these agreements depends on the law of the particular state. As a general rule, however, with the exception
of invention assignment agreements, they are subject to the same analysis as other CNCs.[70]
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1. Alger, 36 Mass. at 52 (1837).
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27. Cal. Bus. & Prof. Code § 16600 (“Except as provided in this chapter, every contract by which anyone is
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30. 61 Cal. App. 4th 881 (http://online.ceb.com/calcases/CA4/61CA4t881.htm) (1998).
31. See EMC Corp. v. Donatelli, Suffolk Superior Court, Civil Action 09-1727-BLS2 (2009).
32. Cal. Bus. & Prof. Code § 16601.
33. Cal. Bus. & Prof. Code § 16602.
34. Cal. Bus. & Prof. Code § 16602.5.
35. State of Florida. "542.335 - Valid Restraints of Trade" (http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=D
isplay_Statute&Search_String=&URL=0500-0599/0542/Sections/0542.335.html). Online Sunshine. State of
Florida. Retrieved 26 April 2015.
36. Vanko, Kenneth. "A Quick State-By-State Guide on the Blue-Pencil Rule" (http://www.non-competes.com/2009/0
1/quick-state-by-state-guide-on-blue.html). Legal Developments In Non-Competition Agreements. Kenneth
Vanko. Retrieved 26 April 2015.
37. Pollard, Jonathan. "Recent Florida Non-Compete Cases: A Decision from the 3rd DCA on Independent Clauses"
(http://www.pollardllc.com/recent-florida-non-compete-cases-decision-3rd-dca-independent-clauses/). Jonathan
Pollard LLC. Jonathan Pollard LLC. Retrieved 26 April 2015.
38. "Casetext" (https://casetext.com/posts/hawaii-bans-non-compete-and-non-solicit-clauses-in-high-tech-employme
nt). casetext.com.
39. Reliable Fire Equipment Co. v. Arredondo, 2011 IL 111871 [1] (http://sherinianlaw.net/wp-content/uploads/2014/1
1/Reliable-Fire1.pdf) (2011).
40. Bires v. Waltom, Case No. 8-4680 [2] (http://sherinianlaw.net/wp-content/uploads/2014/11/1291.pdf) (2009).
41. Fifield v. Premier Dealer Services, 993 N.E.2d 938, 942 (Ill. App. Ct. 1st Dist. 2013)[3] (http://sherinianlaw.net/wp-
content/uploads/2014/11/1120327.pdf) (2013).
42. McInnis v. OAG Motorcycle Ventures, Inc. 2015 IL App (1st) 130097 (June 25, 2015) (http://www.illinoiscourts.go
v/Opinions/AppellateCourt/2015/1stDistrict/1142644.pdf)
43. Channick, Robert (26 October 2017). "Illinois sues payday lender over low-wage workers forced to sign
noncompete agreements" (http://www.chicagotribune.com/business/ct-biz-illinois-payday-lender-noncompete-law
suit-20171026-story.html). Chicago Tribune. Retrieved 11 August 2018.
44. "Non-Compete Agreements - Frequently Asked Questions" (https://static1.squarespace.com/static/577e9d93b3d
b2b9290cd7005/t/5a5d310853450ac1205e382d/1516056841326/Illinois+outreach+materials+on+Non_Compete
_Agreements.pdf) (PDF). Office of the Attorney General. State of Illinois. Retrieved 11 August 2018.
45. See e.g., Novelty Bias Binding Co. v. Shevrin, 342 Mass. 714 (http://masscases.com/cases/sjc/342/342mass714.
html), 716 (1961); Marine Contractors Co., Inc. v. Hurley, 365 Mass. 280 (http://masscases.com/cases/sjc/365/36
5mass280.html), 287 (1974); Edwards v. Athena Capital Advisors, Inc., C.A. No. 07-2418-E, 2007 Mass. Super.
LEXIS 378, 4-5 (Super. Ct. Aug. 7, 2007). See also Russell Beck (September 5, 2008). "Noncompete
Agreements That Don't Mean What They Say" (https://web.archive.org/web/20080911212910/http://www.masshi
ghtech.com/stories/2008/09/01/focus4-Noncompete-agreements-that-dont-mean-what-they-say.html). Archived
from the original (http://www.masshightech.com/stories/2008/09/01/focus4-Noncompete-agreements-that-dont-m
ean-what-they-say.html) on 2008-09-11.; Russell Beck, Negotiating, Drafting and Enforcing Noncompetition
Agreements & Related Restrictive Covenants (MCLE 5th Ed. 2015) (http://www.mcle.org/product/catalog/code/21
50503B05).
46. Alger, 36 Mass. at 53 (1837).
47. See Sherman v. Pfefferkorn, 241 Mass. 468 (http://masscases.com/cases/sjc/241/241mass468.html) (1922).
48. Lunt v. Campbell, No. 07-3845-BLS, *5 (Super. Ct Sept. 2007), quoting Boulanger v. Dunkin' Donuts Inc., 442
Mass. 635 (http://masscases.com/cases/sjc/442/442mass635.html), 639 (2004), citing Marine Contrs. Co. v.
Hurley, 365 Mass. 280 (http://masscases.com/cases/sjc/365/365mass280.html), 287-88, 289 (1974) and All
Stainless, Inc. v. Colby, 364 Mass. 773 (http://masscases.com/cases/sjc/364/364mass773.html), 778 (1974).
49. Edwards v. Athena Capital Advisors, Civil Action No. 07-2418-E (Super. Ct. Aug. 7, 2007) (“Covenants not to
compete are valid if they are reasonable in view of all the facts in a particular case.”), citing Marine Contractors.
Co. v. Hurley, 365 Mass. 280 (http://masscases.com/cases/sjc/365/365mass280.html), 287-288 (1974); All
Stainless, Inc. v. Colby, 364 Mass. 773 (http://masscases.com/cases/sjc/364/364mass773.html), 778 (1974).
50. Sentry Ins. v. Firnstein, 14 Mass. App. Ct. 706 (http://masscases.com/cases/app/14/14massappct706.html), 707
(1982) (quoting Restatement (Second) of Contracts § 188 comment g (1981)); Zabota Community Center, Inc. v.
Frolova, No. 061909BLS1, *2 (May 18, 2006).
51. See Edwards v. Athena Capital Advisors, Inc., C.A. No. 07-2418-E, 2007 Mass. Super. LEXIS 378 (Super. Ct.,
Aug. 7, 2007), quoting All Stainless, Inc. v. Colby, 364 Mass. 773 (http://masscases.com/cases/sjc/364/364mass
773.html), 778 (1974).
52. EMC Corp. v. Gresham, No. 01-2084-BLS (Super. Ct. Nov. 2001), citing Novelty Bias Binding Co. v. Shevrin, 342
Mass. 714 (http://masscases.com/cases/sjc/342/342mass714.html), 716 (1961); Marine Contractors Co., Inc. v.
Hurley, 365 Mass. 280 (http://masscases.com/cases/sjc/365/365mass280.html), 287 (1974).
53. Marine Contractors Co., Inc. v. Hurley, 365 Mass. 280 (http://masscases.com/cases/sjc/365/365mass280.html),
287 (1974), citing All Stainless, Inc. v. Colby, 364 Mass. 773 (http://masscases.com/cases/sjc/364/364mass773.h
tml), 779-80 (1974); Sentry Insurance v. Firnstein, 14 Mass. App. Ct. 706 (http://masscases.com/cases/app/14/14
massappct706.html), 708 (1982); Lunt v. Campbell, No. 07-3845-BLS, *5 (Super. Ct. Sept. 2007), citing
Boulanger v. Dunkin' Donuts Inc., 442 Mass. 635 (http://masscases.com/cases/sjc/442/442mass635.html), 641
(2004); EMC Corp. v. Gresham, No. 01-2084-BLS (Super. Ct. Nov. 2001), citing Kroeger v. Stop & Shop Co. Inc.,
13 Mass. App. Ct. 310 (http://masscases.com/cases/app/13/13massappct310.html), 316 (1982).
54. Novelty Bias Binding Co., v. Shevrin, 342 Mass. 714 (http://masscases.com/cases/sjc/342/342mass714.html),
716-17 (1961).
55. See Marine Contractors Co., Inc. v. Hurley, 365 Mass. 280 (http://masscases.com/cases/sjc/365/365mass280.ht
ml), 288 (1974) (“Marine's interest in protecting its accrued good will from possible incursions by Hurley is not
weakened by the fact that it negotiated the agreement not to compete at the end of Hurley's employment rather
than at some earlier time.”); Novelty Bias Binding Co., v. Shevrin, 342 Mass. 714 (http://masscases.com/cases/sj
c/342/342mass714.html) (1961); Richmond Bros. Inc. v. Westinghouse Bdcst. Co. Inc., 357 Mass. 106 (http://ma
sscases.com/cases/sjc/357/357mass106.html) (1970). But see Zabota Community Center, Inc. v. Frolova, No.
061909BLS1, *2 n.3 (Super. Ct. May 2006) (Although the plaintiff cited its mid-employment threat of termination
as proof of consideration for the CNC, the court “exercising its equitable powers, sees it rather differently.”).
56. Texas Business and Commerce Code, Section 15.50a.
57. Texas Business and Commerce Code, Section 15.50b.
58. Sec. Serv. Fed. Credit Union v. Sanders, 264 S.W.3d 292, 297 (Tex. App.–San Antonio 2008, orig. proceeding)
59. Romboy, Dennis (2016-03-09). "Utah lawmakers pass controversial bill on noncompete contracts" (http://www.de
seretnews.com/article/865649717/Utah-lawmakers-pass-controversial-bill-on-noncompete-contracts.html).
DeseretNews.com. Retrieved 2017-03-19.
60. "What Utah Employers Need to Know About H.B. 251: Post-Employment Restrictions Act | Berman Fink Van
Horn P.C." (http://www.bfvlaw.com/what-utah-employers-need-to-know-about-h-b-251-post-employment-restrictio
ns-act/) Berman Fink Van Horn P.C. 2016-03-30. Retrieved 2017-03-19.
61. See Advanced Marine Enters., Inc. v. PRC Inc., 501 S.E.2d 148, 155 (Va. 1998); Simmons v. Miller, 544 S.E.2d
666, 678 (Va. 2001) (stating that the function, geographic scope and duration of the CNC must be considered
together to determine the reasonableness of the restriction).
62. See e.g. Omniplex World Servs. Corp. v. US Investigations Servs., Inc., 618 S.E.2d 340, 342 (Va. 2005)
(“covenants not to compete have only been upheld when employees are prohibited from competing directly with
the former employer or through employment with a direct competitor.”); see also Motion Control Sys. v. East, 546
S.E.2d 424 (Va. 2001).
63. Non-Competition Law Trends in Virginia (http://www.vaemploymentlawyers.com/2015/06/non-competition-law-tre
nds-in-virginia.html), Virginia Employment Lawyers Blog, June 5, 2015
64. See Paramount, 380 S.E.2d at 925.
65. See Blue Ridge Anesthesia & Critical Care, Inc. v. Gidick, 389 S.E.2d 467, 470 (Va. 1990); Paramount, 380
S.E.2d at 925.
66. Racine v. Bender, 141 Wash. 606, 615, 252 P. 115 (1927)
67. Ayres, I., and Speidel, R.E. Studies in Contract Law, Seventh Edition. Foundation Press, New York, NY: 2008, p.
81
68. "Apple Exec Hired From IBM Ordered to Stop Work" (https://www.pcmag.com/article2/0,2817,2334163,00.asp).
PC World. November 8, 2008. Retrieved 2008-11-09. "In June 2006, Papermaster signed a non-compete
agreement in which he agreed not to work for an IBM competitor for at least a year if he ever left IBM, according
to court documents. He informed IBM of the Apple job offer last month. On October 20, IBM offered him a pay
raise as well as the option to accept one year's salary if he promised not to go to a competitor, but Papermaster
submitted his resignation the next day. On October 22, IBM filed suit."
69. "Paul Teutul Jr Designs, A New Orange county Chopper versus Paul Teutul Sr?" (http://www.trendypress.com/pa
ul-teutul-jr-designs-a-new-orange-county-chopper-versus-paul-teutul-sr). TrendyPress. August 13, 2010.
Retrieved 2011-02-07.
70. For more detailed information, see Beyond the noncompete (http://www.computerworld.com/s/article/9133835/Be
yond_the_noncompete?taxonomyId=10&pageNumber=1)

Works cited
Blake, Harlan M. (1960). "Employee Contracts Not To Compete". Harvard Law Review. 73 (4): 625–91.
JSTOR 1338051 (https://www.jstor.org/stable/1338051).

External links
What you should know about non-compete agreements (https://www.pbs.org/newshour/making-sense/know-non-
compete-agreements/), PBS

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